Top Performers: Uranium Stocks

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". . .[uranium] prices are still nearly 50% below their highs and with the imbalance in supply this is still prime time for investors to make smart uranium plays."

Mineweb's recent selection of 100 of the world's best performing mining stocks, which Barry Sergeant notes is "vastly outperforming any other known grouping of equities," is proof positive that the mining industry is primed for a comeback. The listed stocks have shown a weighted average gain of 357% over the past six months.

In the discussion between analysts and traders as to which mining sector stocks are the best bets, uranium plays seem to be amongst the favored.

The Royal Bank of Canada Capital Markets (RBCCM) team advises an overweight uranium position in its latest recommendations for its Global Mining Best Ideas portfolio. In fact, uranium is amongst RBCCM's top picks. "After record spot prices in 2007 and a subsequent hard correction, RBC Capital Markets believes the uranium spot price will rebound in H2/09. Significant production cuts were announced in late 2008 and RBC Capital Markets believes the supply side of the equation remains at risk, while demand appears to remain in line with expectations."

A look at uranium stocks as a whole reveals that on average prices are up 102.2% from the lows hit when the markets tanked. The uranium miner sector is rebounding quickly from the financial crisis. Yet, prices are still nearly 50% below their highs and with the imbalance in supply this is still prime time for investors to make smart uranium plays.

The long-term supply/demand fundamentals of the uranium market are what's driving this resurgence in investor interest. It's certainly not the uranium spot price, which has remained fairly static for months. While industry consultant TradeTech has recently lowered its spot price indicator to US$42 per pound U308, their long term price remains at US$69 per pound.

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